Gain or loss

answered on 15-May-26 14:14

For example, a) Case 1: A ltd (Indian company) imported goods worth $ 100 on Jan 1 payable after 1 month on Feb 1. Spot USD-INR = 50, Spot on 1st Feb USD-INR = 55. Cash outflow = 55*100 = ₹ 5500. In this case, whether the difference in spot rates of ₹ 5 (55-50) amounting to ₹ 500 (5*100) is the loss to the importer because of change in exchange rate over the time? b) Case 2: Forward contract A ltd (Indian company) imported goods worth $ 100 on Jan 1 payable after 1 month on Feb 1. Spot USD-INR = 50, Spot on 1st Feb USD-INR = 55. Company A entered into forward contract to buy $ at 52. Cash outflow = 52*100 = ₹ 5200 In this case, whether the difference in spot rate and forward rate of ₹ 2 (52-50) amounting to ₹ 200 (2*100) is the loss to the importer? c) Case 3: Future Contract A ltd (Indian company) imported goods worth $ 100 on Jan 1 payable after 1 month on Feb 1. Spot USD-INR = 50, Spot on 1st Feb USD-INR = 55. Company A long i month futures contract to buy $ at 52. Gain on futures = (55-52)*100 = 3*100 = ₹ 300 Cash outflow = 55*100 = ₹ 5500 Net cash outflow = ₹ 5500-300 = ₹ 5200 In this case, whether the difference in cash outflow at spot and delivery i.e. 5200-5000 = ₹ 200 is the loss to the importer? Sir, if each is seen independently whether the loss is computed as per above or in different manner? [Video Time Stamp: 10:19]

latest answer

In all cases your loss computation is right

Tax and transfer payments are constant

answered on 27-May-26 09:58

When tax alone is constant, we are subtracting with income and added to govt expenditure But when tax and transfer payments are constant we are only adjusting with income alone and no change in Govt expenditure . Why? [Video Time Stamp: 08:22]

latest answer

When transfer payments are introduced, we do not change $G$ because the government has not increased its own direct demand for goods and services. Instead, the transfer payments ($TR$) are bundled entirely into the disposable income formula. The fraction of that transfer money that actually enters the economy depends on the consumers' Marginal Propensity to Consume ($b$).

SriVidhya M S

CA Foundation

★ 450

1

115

How to decide depriciation rate for fixed asset in case of wdv method(as per books)

answered on 25-May-26 16:09

Sir ,How to decide depriciation rate for fixed asset in case of wdv method(as per books)

latest answer

While purchasing the asset they will decide no. of yeard to use the asset based on the wear & tear and the scrap value. So that the useful liffe is is treated

Rajesh Mutyala

CA Inter

★ 9K+

3

130

EFR Formulae

answered on 14-May-26 10:48

In the Formulae, were payable and liabilities used. Does it include debt liabilities in it ?

latest answer

No. When we say liabilities we are referring to ST or Current liabilities LT debt / Equity are external funds raised after using the formula

vignesh vijayakumar

CA Final

★ 0

1

156

Ind AS 19 - Return on Plan Assets - Contribution made

answered on 22-May-26 16:23

Hi sir, just want to make sure i've got it clearly. The Net Interest is recognised based on Opening Balance x Discount Rate The remeasurement gain/loss is based on actuals less whatever is recognised above So if i make a contribution in the middle of the year, will the incremental interest pertaining to that show up in the remeasurement gain/loss or the net interest in P/L? [Video Time Stamp: 04:44]

latest answer

Ok sir, thank you!

Vishnu Muraleedharan

CA Final

★ 32K+

2

114

Public issue share count

answered on 14-May-26 10:51

When calculating public issue, we r multiplying new no. of shares * new issue price.. so when calculating net gain also we have to take 50+new shares issued should be shown right, but y in post public issue also it is shown 50 shares only [Video Time Stamp: 00:00]

latest answer

I guess you are asking a query w.r.t Q 33 and not Q 34. The query is tagged to Q 34 We are not increase share count because in case of a rights issue, same i.e existing shareholders get the new shares In case of a public issue there new shareholders may be completely diff from existing share hlders We are trying to find out gain / loss for existing shareholders and not new share holders

Lavanya Ravi

CA Final

★ 180

1

111

Spot rate

answered on 14-May-26 10:32

Sir, the spot rate that is compared with the forward rate to arrive at gain or loss is Current spot rate or Spot at future date. And what is the logic behind considering the same? [Video Time Stamp: 18:53]

latest answer

We are assuming future spot rate is same as current spot rate. We are trying to assess if that were the case which of the 3 choices is best suited for the company

Journal entry

answered on 14-May-26 10:10

At last ,X should pay ₹3500 adjusting deficiencies ₹2625 to bank right.? Then why we debiting Y's A/C [Video Time Stamp: 09:00]

latest answer

To recover from Y

SriVidhya M S

CA Foundation

★ 450

1

138

Value of contract Vs Price of forward contract

answered on 13-May-26 16:49

Excerpts of the Module ..The value of a forward contract is incorrect because delivery price is not given ..In my view this 37498.11 is price of forward contract not value..Do share your view..

latest answer

Thank you Sir

Mansha Tutlani

CA Final

★ 555

2

141

Future spot will be equal to forward price

answered on 13-May-26 16:29

Sir, in Part 2, if the company anticipates that future spot is same as forward, it won't enter into forward contract. Are we also assuming that the company is not hedged through money market which is advised to follow in part 1? [Video Time Stamp: 15:55]

latest answer

If spot is same as forward then obviously it means no hedge of any form